Technical Chart Damage as a Result of Dollar Strength
Theprecious metals complex has traded under pressure today with U.S. dollarstrength contributing the most significantpercentage of today's decline. Gold, silver and palladium'sprice decline resulted in major chartdamage for all three precious metals. They all sustained a combination of selling pressure and dollar strengthwhich took current pricing below their 50-day moving averages.
As of 4:00 PM Eastern standard time, gold futures (June 2018 Comexcontract) are currently fixed at $1,326.30,which is a $12 decline (-0.90%). Spot gold is presentlyfixed at $1,323.90, a decline of$11.30 on the day. Dollar strength contributed the vast majority of damageamounting to -$8.95, with selling pressure contributinganother -$2.35.
Althoughgold pricing opened above its 50-day moving average, dollar strength andselling pressure quickly moved pricing well below the average. This isconsidered by many analysts to be a significantbenchmark used in short-term forecast models.
Last week's dynamic upside spike in silver pricing wasdiminished by today's over-the-top selling pressure. On Wednesday of lastweek, silver gained $0.40 on the day, while today'ssharply lower pricing resulted in a $0.56 decline, both giving back theentirety of last week's gains and closing below its 200-day moving average. Of the four precious metals, only silver has a 200-day moving average hittingabove its 50-day moving average.
Of allfour precious metals, palladium hasexperienced the most significantpercentage decline today. Palladium futures are down 5.26%, currently fixed at$976, which is a net decline of $54.20 on the day. Cash prices for palladiumare also under dramatic pressure, losing 4.12% today. However, in the case of palladium,the clear majority of today's lower pricing can be attributed to strong sellingwhich accounts for $35.20 of today's $42 decline, with only $6.80 beingattributable to dollar strength.
The only precious metal being boughttoday is platinum, which has gained $1.20 in regulartrading. However, that gain is dwarfed in comparison to dollar strengthwhich accounts for a -$6.20. Platinum pricing broke below its 50-day movingaverage last week.
Ourtechnical studies indicate the first level of support in gold at $1,318, which is based onFibonacci harmonics. This price point is both a 38% and 78% Fibonacciretracement. Below that is the majorsupport level of gold at $1,303.
Resistancein gold is currently at $1,339, with major resistanceat $1,355 to $1,365 per ounce.
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Wishingyou as always, good trading,
By Gary WagnerContributing tokitco.com
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gary@thegoldforecast.comwww.thegoldforecast.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.